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Real estate

NPS-Allianz $2.3 bn fund seeks to buy stake in Singapore tower

Dec 09, 2020 (Gmt+09:00)

OUE Bayfront in Marina Bay area, Singapore
OUE Bayfront in Marina Bay area, Singapore

The National Pension Service and Germany’s Allianz SE are in negotiations  to jointly buy a 50% stake in OUE Bayfront, a Grade A office tower in Singapore's Marina Bay area, according to investment banking sources on Dec. 9.

The expected purchase will be made through their 50:50 co-investment fund Allianz Real Estate Asia-Pacific Core I that raised $2.3 billion in June to invest in core real estate in the region.

OUE Bayfront was redeveloped from the former Overseas Union House and has a gross floor area of 46,500 square meters. It houses the NPS' Singapore office.

The 18-story building is regarded as the crown jewel of OUE C-Reit’s portfolio comprised of seven properties. They were developed by Indonesia’s real estate firm Lippo Group. OUE C-Reit is listed on the Singapore stock exchange.

Based on the building’s estimated value of 1.28 billion Singapore dollars ($959 million), the 50% stake is worth around $480 million.

Last month, OUE C-Reit said in a bourse filing that negotiations and due diligence are continuing exclusively with an entity linked to Allianz Real Estate with respect to the OUE Bayfront partial stake sale, according to the Business Times. 

Bank of America is the anchor tenant of the commercial building made up of offices, restaurants and retail facilities. Marina Bay is Singapore’s new downtown, located in the central business district of the city state.

The NPS-Allianz fund targets landmark office buildings and logistics and residential facilities in big cities in Asian countries such as Australia, Singapore, Japan and China, according to NPS.

In August, the fund acquired a multifamily residential building in Japan for $160 million. Separately, NPS bought half of Frasers Tower, a Grade A office tower in the Marina Bay area, Singapore, for around 360 billion won in June 2019.

Recently, the $725 billion pension scheme teamed up with US-based Stockbridge Capital Group to acquire a $2 billion portfolio of Class A logistics facilities in the US, in the largest industrial property transaction by value since the coronavirus struck.

Write to Jung-hwan Hwang at jung@hankyung.com

Yeonhee Kim edited this article.

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